Making Tax Digital for Income Tax applies to landlords when their qualifying gross property income, combined with any qualifying self-employment income, is above the relevant threshold. The test uses income before mortgage interest, agent fees, repairs and other expenses. In-scope landlords must keep digital records, send quarterly updates and submit their tax return using compatible software.
Which landlords need to use MTD for Income Tax?
A landlord needs to consider MTD when they are registered for Self Assessment, receive property income and their qualifying income is above the threshold for the relevant test year. The first mandatory phase started on 6 April 2026 for qualifying income above £50,000. The threshold reduces to more than £30,000 from April 2027 and more than £20,000 from April 2028.
| Return tested | Qualifying income | Start date |
|---|---|---|
| 2024/25 | More than £50,000 | 6 April 2026 |
| 2025/26 | More than £30,000 | 6 April 2027 |
| 2026/27 | More than £20,000 | 6 April 2028 |
The landlord threshold is based on gross rent, not profit
For MTD qualifying-income purposes, property income is considered before expenses. That means mortgage interest, letting-agent fees, insurance, repairs and other costs do not reduce the gross income used for the threshold test. A landlord can therefore have relatively low taxable profit but still be required to use MTD because gross rental receipts are above the threshold.
How jointly owned property is treated
If you own a property jointly, your own share of the property income generally counts towards your qualifying income. For example, if a property earns £50,000 of rent and two siblings are entitled to equal shares, each would normally have £25,000 of qualifying property income from that property, assuming there are no other relevant income sources.
HMRC also has a rule for cases where a joint owner only receives notice of their share after expenses have already been deducted: HMRC may assess that reported figure for qualifying-income purposes. Because joint ownership can be structured in different ways, use the official qualifying income guidance if the split is not straightforward.
What if you also run a business?
This is one of the biggest traps for landlords. Qualifying self-employment and property income are added together. You cannot test your rental income and business turnover separately and assume you are outside MTD because both are individually under the threshold.
What if you own several properties?
Multiple properties within the same property business contribute to the property income reported for that business. MTD is concerned with the digital records and summaries for the relevant property-income source, not treating each address as a completely separate taxpayer. You still need records detailed enough to support the income and expense figures for your portfolio.
For landlords with several properties, regular bookkeeping becomes especially useful because rent, management fees, repairs, insurance and finance costs can otherwise become difficult to allocate and review before each quarterly update.
What digital records do landlords need to keep?
In-scope landlords need compatible software to create and preserve digital records of property income and expenses. The software is then used to send quarterly updates to HMRC. Keeping the records digitally does not change the underlying tax rules for whether an expense is allowable; it changes how the information is captured, maintained and reported.
- Rental income received.
- Agent and management charges.
- Repairs and maintenance costs.
- Insurance and other property running costs.
- Finance-cost information needed for the annual tax return.
- Other property-business income and expense categories required by the software and HMRC rules.
What are the quarterly deadlines for landlords?
Landlords using standard update periods have quarterly deadlines of 7 August, 7 November, 7 February and 7 May. Each update is cumulative from the beginning of the tax year to the end of that period. They are not four landlord tax returns. The final tax return is still completed after the tax year and due by 31 January.
See our MTD quarterly updates guide for the standard and calendar update-period tables and an explanation of what happens after the fourth update.
How does MTD relate to Capital Gains Tax?
MTD for Income Tax covers the digital reporting obligations for self-employment and property income. It does not replace the separate Capital Gains Tax rules that can apply when a landlord disposes of a property. If you sell or transfer a property, you may have separate CGT calculations and reporting deadlines in addition to your MTD obligations.
Our Capital Gains & Property Tax page explains the wider support available around property disposals and tax planning. Keep the two processes conceptually separate: MTD manages ongoing income records and reporting, while CGT can arise on a disposal.
What if your rental income later falls?
Once you have entered MTD, one lower-income year does not automatically take you out. HMRC's current rules generally allow an opt-out once qualifying income has stayed at or below the relevant threshold for three consecutive tax years. There are separate rules where income sources cease completely or your circumstances otherwise change.
Are landlords ever exempt?
Yes. Some taxpayers are automatically exempt and others can apply, including people who are digitally excluded where it is not reasonable to use software because of their circumstances. The exemption applies to the individual, not simply because the rental business is small or the landlord prefers paper records.
Before relying on an exemption, check HMRC's current exemption guidance. If HMRC confirms that you are exempt, you continue to report income and gains through the normal Self Assessment process instead of following the MTD digital obligations.
How CFO Accounting can help landlords prepare
The easiest transition is to have rental records organised before the first quarter begins. We can help review the current bookkeeping process, move records into suitable cloud software, keep income and expenses reconciled and support the quarterly and annual reporting cycle. For landlords with self-employment income as well, we can keep both sources visible so the combined threshold and tax position are easier to manage.
- Ongoing digital bookkeeping for rental and business records.
- Self Assessment support for the annual tax return.
- Property tax and CGT support when disposals arise.
- Full MTD Income Tax guide covering thresholds, software and exemptions.
Landlord MTD FAQs
Is the MTD threshold based on rent after mortgage costs?
No. The threshold looks at qualifying gross property income before expenses. Mortgage interest and other property costs do not reduce the gross-rent figure used for the MTD threshold test.
Does each property have its own £50,000 or £30,000 threshold?
No. The threshold applies to your total qualifying income, which can include property income across your property business plus qualifying self-employment income. It is not a separate threshold for every address.
Do I count all rent from a jointly owned property?
Usually you count your own share of the property income. If the property produces £50,000 and your entitlement is 50%, your share would generally be £25,000 for the qualifying-income calculation.
Do I still need Self Assessment?
Yes. MTD changes the record-keeping and reporting process, but you still complete and submit the tax return through compatible MTD software after the tax year.